Turkish Deputy PM warns of forex risks

Turkish Deputy PM warns of forex risks

ISTANBUL - Anadolu Agency
Deputy Prime Minister Ali Babacan has said Turkey has been one of the countries most severely affected by the possibility of a liquidity withdrawal from markets due to its internal vulnerabilities, warning the private sector against currency risks.

“Domestic incidents and the country’s current account deficit put us among those who are affected more than the average. However, the main reason for the changes in all parameters has been the statements about global liquidity conditions,” he said speaking at an Istanbul Chamber of Industry (ISO) monthly committee meeting on July 24.

“We are among the countries whose interest rates are affected the most, but we’re somewhere in the middle in terms of currency,” he said.

According to Babacan, the main reason behind the fall of the stock exchange index, the rise of interest rates and the devaluation of local currency against the U.S. dollar is the U.S. Federal Reserve’s remarks indicating that it would stop pumping liquidity into markets. He still said there was not much to worry about regarding the past two month’s developments, as all the institutions had prepared themselves.

However, he warned against the risks of currency volatility and advised sector representatives to be cautious in foreign exchange transaction. “We say, ‘if there is foreign currency, make it balanced.’ I think they should watch over this. Saying the currency will rise or fall is like gambling. One should be careful to protect themselves from currency risks,” Babacan said.